As the dynamics of many Texas families change, there are more and more couples who choose to cohabitate — often with the intent to marry at a later date. Although living together may perfectly fit the circumstances of a couple, untangling finances in the event of a breakup can be messy. Cohabitating couples may want to consider signing a cohabitation agreement, which is similar to a prenuptial agreement for married couples.
When one party in a marriage purchases property, it will belong to both spouses in a community property state such as Texas. The interests of both spouses in a marriage are protected, but two individuals who are cohabitating may not be equally protected. If an unmarried couple takes on a mortgage, they will both be responsible for the payment, and if it is sold, the profits will be split. But what happens when one party moves out?
By signing a cohabitation agreement, the couple can specify how the mortgage and insurance payment will be split. Also, the agreement can spell out who will be responsible for maintenance of the property. A written agreement can also deal with the event of an end to the relationship and what will happen when one party wants to keep the property.
It is not uncommon for cohabitating couples to treat finances casually and manage adequately with verbal agreements. However, written agreements may be more binding in cases of contentious breakups. Having a skilled Texas divorce attorney review all documents before committing to a major purchase may be advisable. A lawyer who is experienced in drafting contracts such as a prenuptial agreement can also assist with drafting a legal cohabitation agreement to avoid unpleasant litigation in the future.
Source: deseretnews.com, “Cohabiting couples might want to think twice about buying a house together, experts warn”, Lois M.Collins, Sept. 7, 2016